part iii, subpart v, chapter 3, section a. … · web viewoverview in this section this section...

M21-1MR, Part III, Subpart v, Chapter 3, Section A

Section A. Apportionment Process

Overview

In this Section This section contains the following topics:

Topic Topic Name See Page1 General Information on Apportionments 3-A-22 Receiving and Developing an Apportionment

Claim3-A-8

3 Decision and Notification of an Apportionment Claim

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4 Handling an Apportioned Award Subject to Offset or Withholding

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1. General Information on Apportionments

Introduction This topic contains general information on apportionments, including

overview of the apportionment process apportionment of a competent primary beneficiary’s benefits who may receive an apportionment of a competent primary beneficiary’s

benefits when an apportionment is not payable apportionment of death benefits apportionment in special cases: cross-references restriction on the concurrent payments of Dependents’ Educational

Assistance (DEA) and apportioned benefits, and disclosing information in claims folder to primary beneficiary and/or

claimant.

Change Date March 28, 2011

a. Overview of the Apportionment Process

When the Department of Veterans Affairs (VA) receives a claim for an apportionment of a primary beneficiary’s benefits, VA must develop for evidence, decide whether to award or deny the apportionment claim, and notify the primary beneficiary and claimant of the decision.

Additionally, in some cases, VA must offset or withhold part or all of the apportioned award.

b. Apportionment of a Competent Primary Beneficiary’s Benefits

In order for a claimant to receive an apportionment of a competent primary beneficiary’s benefits, the claimant must

file a claim for an apportionment, and demonstrate a need for benefits, per the requirements of 38 CFR 3.451, or live apart from the Veteran and not receive a reasonable level of support, as

stated in 38 CFR 3.450.

If the requirements above are met and the primary beneficiary will not suffer undue hardship, VA may authorize an apportionment of the primary beneficiary’s benefits to be paid to the claimant.

Important: VA’s primary obligation is to the Veteran. Even if the claimant demonstrates a need, VA cannot impose undue hardship on the Veteran.

Continued on next page

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1. General Information on Apportionments, Continued

c. Who May Receive an Apportionment of a Competent Primary Beneficiary’s Benefits

An apportionment may be paid to

an estranged spouse and child, children in an estranged spouse’s custody a child or children not living with the primary beneficiary or surviving

spouse and to whom the primary beneficiary or surviving spouse is not reasonably contributing, or

a dependent parent (in compensation cases).

d. When an Apportionment Is Not Payable

Per 38 CFR 3.458, a primary beneficiary’s benefits will not be apportioned, when

the total benefit payable to the primary beneficiary is so small that it does not allow payment of a reasonable amount to any apportionee – this regulation calls for a subjective assessment of the apportionment’s impact on the claimant’s financial status- for example, the available amount apportionable from the primary beneficiary’s benefits may be so small that it would constitute no more than a token payment to the apportionee, with little or no mitigation of the apportionee’s need (see 38 CFR 3.458(a))- also note 38 CFR 3.451 which suggests that apportionment of less than 20 percent of a Veteran’s benefits may not provide a reasonable amount

the spouse of the primary beneficiary has been found guilty of conjugal infidelity by a court having proper jurisdiction

the spouse of the primary beneficiary has lived with another person and held himself/herself out openly to the public to be the spouse of another person, unless that relationship was entered in good faith because the spouse believed the marriage to the primary beneficiary was legally terminated- Make no apportionment to the spouse unless there has been a reconciliation and later estrangement.- The primary beneficiary is still entitled to benefits as a married Veteran as long as he/she knows the whereabouts of the estranged spouse and, in pension cases, is contributing to his/her support.

Note: Special consideration must be given to claims for apportionment from an estranged spouse or a spouse for whom the Veteran is not receiving additional benefits, as it could adversely affect the rate of the Veteran’s benefits. For more information, see M21-1MR, Part V, Subpart iii, 1.F.38.o.


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d. When an Apportionment Is Not Payable (continued)

another person legally adopts the child of the primary beneficiary, (although the additional compensation payable for that child may still be apportioned) – Note: VAOPGCPREC 16-94, or

a child under age 18 enters active military service. Any additional money will be paid to the Veteran until the child’s 18th birthday, unless the child is included in an existing apportionment to an estranged spouse. Make no adjustments in the apportioned award to the estranged spouse based on the child’s entry into military service. For the regulation pertaining to this topic, refer to 38 CFR 3.503(a)(2).

Note: A claim for an apportionment is by or on behalf of a dependent for whom the primary beneficiary is not providing reasonable support. An apportionment is not made to a dependent as a convenience on the part of the primary beneficiary. The primary beneficiary cannot request a portion of his or her benefits not be paid in order to allocate those benefits to another person. For regulations pertaining to this issue, refer to 38 CFR 3.450(c) , and 38 CFR 3.106 .

e. Apportionment of Death Benefits

Death benefits may be specially apportioned if warranted by the equities and demonstrated hardship.

The provisions in M21-1MR, Part III, Subpart v, 3.A.3 for awarding or denying an apportionment claim and notifying the primary beneficiary and claimant apply equally to Improved Death Pension cases. M21-1MR, Part III, Subpart v, 3.C.9 outlines special provisions for handling apportionments in other death cases.

Reference: For more information on the apportionment of death benefits, see 38 CFR 3.450 (general apportionment regulations) 38 CFR 3.451 (special apportionments) 38 CFR 3.459-3.461 (death compensation, death pension, and DIC), and 38 CFR 3.400(e) (effective dates for apportionment awards)

Note 1: Death benefits may be paid to children of a Veteran, as an apportionment, pending resolution of a surviving spouse’s eligibility. For more information, see M21-1MR, Part IV, Subpart iii, 3.E.21.a.


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e. Apportionment of Death Benefits (continued)

Note 2: Children not in custody of the surviving spouse are not subject to an apportionment, but are entitled to Improved Pension in their own right. For more information, see M21-1MR, Part V, Subpart iii, 1.E.31.a.

f. Apportionment in Special Cases: Cross-references

Subject to the restrictions of 38 CFR 3.458, all or part of a primary beneficiary’s disability benefits may be apportioned in the special cases listed in the table below.

If the case involves … Then refer to …an incompetent Veteran M21-1MR, Part III, Subpart v,

3.C.10, and M21-1MR, Part III, Subpart v,

9.B.8.a .a Veteran who has disappeared M21-1MR, Part III, Subpart vi, 8.2

M21-1MR, Part III, Subpart vi, 8.3 , and

M21-1MR, Part III, Subpart vi, 8.4 .an incarcerated Veteran M21-1MR, Part III, Subpart v, 8.B.an incarcerated surviving spouse M21-1MR, Part III, Subpart v, 8.C.forfeiture M21-1MR, Part III, Subpart vi,

5.B.5.g.

Note: Assign Special law (SL) code 13 in a special apportionment under 38 CFR 3.451 in death cases, except for cases involving Improved Pension.


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g. Restriction on the Concurrent Payments of DEA and Apportioned Benefits

Use the table below to determine if an apportionee’s entitlement to Dependents’ Educational Assistance (DEA) prohibits him/her from receiving an apportionment of the primary beneficiary’s benefits.

If the apportionee is a …

Then the entitlement to DEA … Reference

spouse does not prohibit the spouse from receiving a concurrent payment of an apportionment of the primary beneficiary’s compensation.

See 38 CFR 3.707(b) ,

and 38 CFR 21.3023(d) .

child under age 18, or

helpless child

does not prohibit the child from receiving a concurrent payment of an apportionment of the primary beneficiary’s benefits, if the individual case warrants this action.

Note: A special restorative training allowance may also be paid concurrently with compensation, Dependency and Indemnity Compensation (DIC), or pension.

See M21-1MR, Part III,

Subpart iii, 6.B.6.a, and

38 CFR 21.3023(b) .

child age 18 or over, or

not helpless

prohibits the child from receiving an apportionment of the primary beneficiary’s benefits.

The child must elect which benefit he/she wants to receive. If the child elects DEA, he/she is no longer eligible for an apportionment of the primary beneficiary’s benefits.

See M21-1MR, Part III,

Subpart iii, 6.B.7.b, and

38 CFR 21.3023(a) .


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h. Disclosing Information in the Claims Folder to the Primary Beneficiary and/or Claimant

Upon request of either of the following individuals, disclose information in the claims folder that affects the payment or potential payment to a claimant for apportionment:

the primary beneficiary, and/or the claimant for an apportionment of the primary beneficiary’s benefits.

However, when the Privacy Act forbids a total disclosure of correspondence or other submissions from either party to the other, separately furnish the information which is vital to the decision to be made.

Example: Information vital to the decision which is to be made will usually include disclosure of income and expenses of the parties.

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2. Developing an Apportionment Claim

Introduction This topic contains information on developing for evidence in order to make a decision as to whether the apportionment is appropriate, including

determining a bar to the apportionment simultaneous development of evidence required evidence from the primary beneficiary and claimant due process for requested evidence from primary beneficiary and claimant withholding action and end product (EP) control determining amount of interim withholding for apportionment, and handling a request for a hearing.


a. Determining a Bar to the Apportionment

When a claim for apportionment is received, immediately determine if there is a bar to the apportionment, as

identified in 38 CFR 3.458, and discussed in M21-1MR, Part III, Subpart v, 3.A.1.d. Reference: For more information on determining a bar to apportionment based on offset or recoupment, see M21-1MR, Part III, Subpart v, 3.A.4.

b. Simultaneous Development of Evidence

If there is no bar to apportionment, simultaneously send development letters to request the required evidence from the

primary beneficiary, and apportionment claimant


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2. Developing an Apportionment Claim, Continued

b. Simultaneous Development of Evidence (continued)

Information regarding the financial status of all parties involved may be required to determine need on the part of the claimant and hardship on the part of the primary beneficiary. The nature of evidence that may be needed is described in M21-1MR, Part III, Subpart v, 3.A.2.c.

Note: Simultaneous development and predetermination notification requires concurrent control of the issue with EP 130 and EP 600. For specific instructions on control with two EPs, see M21-1MR, Part I, 2.B.7.b.

c. Required Evidence From the Primary Beneficiary and Claimant

Inform the primary beneficiary of allegations of need made by the dependent. Request the beneficiary and the claimant furnish information about net worth, income and expenses. Use VA Form 21-0788, Information Regarding Apportionment of Beneficiary’s Award for this development.

Source Description of EvidenceAsk the primary beneficiary to furnish

a statement as to the amount and frequency of any support or contributions being made to or on behalf of the claimant, or

an explanation of the reasons for non-support, if the primary beneficiary is not making any contributions, and

proof of the contributions such as, canceled checks or any receipts (if there is any conflicting information between the beneficiary and the claimant, as to the primary beneficiary’s contributions of support).

Note: If the primary beneficiary does not provide support or have an explanation for non-support, then the decision is based on the evidence of record, such as information about the financial status and any hardship reported by the beneficiary and claimant.


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c. Required Evidence From the Primary Beneficiary and Claimant (continued)

Source Description of EvidenceAsk the primary

beneficiary claimant(s), and claimant’s

custodian (if applicable),

to furnish

a statement of net worth, annual income and expenses

an explanation of any hardship that would be created or experienced by the- primary beneficiary if the apportionment was made, and- claimant if the apportionment was not made.

Reference: For more information on the required evidence from the primary beneficiary and claimant, see 38 CFR 3.451.


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d. Due Process for Requested Evidence From the Primary Beneficiary and Claimant

When evidence is requested from the primary beneficiary and the claimant, notify

the claimant that he or she must present the evidence within 30 days the primary beneficiary that he or she must present the evidence within 60

days, and both the claimant and primary beneficiary that a decision will be made after

the expiration of the specified time limit on the basis of the evidence of record, unless extension of time is required for good cause.

In addition, inform the primary beneficiary

of the amount and effective date of any interim withholding to be established

of the statutory authority for granting an apportionment (38 U.S.C. 5307) of the effective date from which an apportionment may be made on the

basis of the pending claim (38 CFR 3.400(e)), and that the amount of his/her award will be reduced by the monthly amount of

the apportionment authorized.

Note: For the purpose of effective date under 38 CFR 3.400(e), “Original claim” refers to the original claim received from the primary beneficiary, with a presumption that an apportionment claim is received before any benefits have been paid. The effective date for other than original claims refers to the date of receipt of the apportionment claim after benefits to the primary beneficiary have already been issued. The concept is to preclude creation of undue overpayment against the primary beneficiary if an apportionment is authorized. (This concept was discussed in VAR Transmittal Sheets 218 of August 10, 1961, and 248 of July 20, 1962.)


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e. Withholding Action and EP Control

When initial development is sent to primary beneficiary and claimant, establish pending end products (EPs) in Share according to M21-1MR, Part I, 2.B.7.b, using

EP 130 for the claimant, with a 30-day control EP 600 for the Veteran or primary beneficiary, with a 65-day control, and amend the primary beneficiary’s award to reduce the primary award by the

tentative amount of the apportionment effective the first day of the month following the month in which the notice of proposed adverse action period elapses.

Example: An estranged spouse files an apportionment claim on April 17. The development letters are released on May 22. The withholding is effective August 1.

Note: Do not change the dependency status on the 304 screen or in the corporate record until final action is taken to grant the apportionment. For running BDN awards, complete the 403 screen indicating Type 1 for

initial withholding action. For VETSNET awards refer to the VETSNET Awards Handbook for

detailed instructions.

f. Determining Amount of Interim Withholding for Apportionment

The due process notification proposes withholding benefits from the first of the month following a 65-day development period. The amount of withholding from the primary beneficiary’s benefits is equal to the amount apportioned to the claimant. However, VA must estimate the apportioned amount will be estimated at this time, since all evidence necessary for a final decision may not be of record. For information on making a final decision, see M21-1MR, Part III, Subpart v, 3.A.3.a.

The amount established for an interim withholding may require a subjective determination due to absence of complete evidence. Generally, consider

the additional amount the primary beneficiary is paid for dependents, 38 CFR 3.451 that establishes parameters between 20 percent and 50

percent of the Veteran’s benefits, and The final decision can grant an apportionment amount less than the interim

withholding, but not more than the interim withholding.


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f. Determining Amount of Interim Withholding for Apportionment (continued)

Note: If a claim is received by a dependent from whom the primary beneficiary is not receiving benefits

a prospective withholding may not be necessary, since the apportionment can be taken from the additional amount that will be paid when the dependent is added to the primary beneficiary’s benefits, and

the claimant may need to furnish evidence to establish relationship or dependency and well as income and expense information.

g. Handling a Request for a Hearing

If, within 30 days of the release of the notice of proposed adverse action, the Veteran or surviving spouse requests a hearing and a final decision cannot be made before the end of the 65-day control period, amend the effective date of the Type 1 withholding so that payments to the Veteran or surviving spouse are not reduced until after a final decision is reached.

Note: Since a hearing is a form of development for evidence in conjunction with the claim, the EP should continue until the final decision is made.

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3. Decision and Notification of an Apportionment Claim

Introduction This topic contains information on awarding or denying a claim for apportionment and notifying the primary beneficiary and the claimant, including

determining when to make the decision considering evidence received after a decision determining the amount of an apportionment preparing VA Form 21-441, Special Apportionment Decision for a favorable

or unfavorable apportionment decision preparing and processing the primary award effect of deferred awards on pending apportionment claims determining the effective date and award action after apportionment

decisions rounding the apportioned amount balancing the award amount distributing the available amount effect of rate changes on primary award simultaneous apportionment of compensation or pension and a subsistence

allowance notifying the primary beneficiary and apportionment claimant, and responding to a Notice of Disagreement (NOD).


a. Determining When to Make the Decision

Prepare the apportionment decision based on an evaluation of the evidence of record. See the following table to determine when to make a decision.

If the claimant... Then make an administrative decision...responds within 30 days, but the evidence does not demonstrate a hardship on the part of the claimant.

based on the claimant’s response and any other pertinent evidence of record

deny the pending claim clear the pending EPs, and send notification of the decision.


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3. Decision and Notification of an Apportionment Claim, Continued

a. Determining When to Make the Decision (continued)

If the claimant... Then make an administrative decision...does not respond within 30 days and/or the evidence of record does not demonstrate hardship on the part of the claimant.

based on the evidence of record deny the pending claim clear the pending EPs, and send notification of the decision.

furnishes evidence of a hardship but payment of an apportionment will create a hardship for the Veteran or surviving spouse.

Based on - the evidence received if both parties respond within 65 days; otherwise- the evidence of record after the expiration of 65 days

deny the pending claim clear the pending EPs, and send notification of the decision

furnishes evidence of a hardship and the evidence of record does not demonstrate a hardship on the part of the Veteran or surviving spouse.

Based on - the evidence received if both parties respond within 65 days; otherwise- the evidence of record after the expiration of 65 days

grant the pending claim clear the pending EPs, and send notification of the decision

Note: In some situations, an apportionment may be paid to a claimant before 65 days as long as it will not result in any adverse action on benefits to which the Veteran or surviving spouse is entitled.


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b. Considering Evidence Received After a Decision

There is a 60-day appeal period following the date of notification of an apportionment decision. For more information on a notice of disagreement of an apportionment decision, see M21-1MR, Part III, Subpart v, 3.A.3.n.

If additional evidence is received after the expiration of 60 days from the date of notification of the apportionment decision, handle that evidence as a new claim.

If evidence is received within the 65-day due process period, handle it as described in the following table.

If evidence is received... Then...within 30 days of the date of development notification

consider the evidence in the initial apportionment decision.

after a decision is made, but before the expiration of the 65-day due process and the evidence will change the outcome of the decision

prepare a new apportionment decision to include the additional evidence.

after a decision is made, but before the expiration of the 65-day due process and the evidence does not change the outcome of the decision

annotate the evidence that is does not affect the decision and mention the additional evidence in the apportionment award notification.

c. Determining the Amount of an Apportionment

If making an apportionment, determine the amount awarded from an equitable assessment of any hardship or demonstrated need on the part of the primary beneficiary and the claimant. Consider such factors as the amount of VA benefits available, other resources and income of the primary beneficiary and the claimant, and special needs of the primary beneficiary and the claimant. Consider these specific criteria when evaluating an apportionment claim under different benefit programs.


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c. Determining the Amount of an Apportionment (continued)

Benefit Program CriteriaCompensation,Service Pension, and Death Pension

38 CFR 3.451

Authority: See 38 CFR 3.453 and 3.460Live Pension 38 CFR 3.450, or

38 CFR 3.451 (See Note, below)DIC 38 CFR 3.461(b)(1), or

38 CFR 3.451Live Pension adjusted for a hospitalized or incompetent Veteran

38 CFR 3.454

Important: When the primary beneficiary is receiving additional benefits for dependents and the evidence shows he/she is not reasonably contributing to their support, hardship for the primary beneficiary would not normally result from apportionment of the additional amount payable for such dependents.

Note: CAVC decision in Hall v. Brown, No. 92-532, distinguishes adjudication under one regulation as being independent of the other regulation. This decision did not identify a need for hardship to apportion a live pension benefit.


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d. Preparing VA Form 21-441 for a Favorable or Unfavorable Apportionment Decision

A formal memorandum for file is required for both favorable and unfavorable decisions on claims for apportionment.

The Veterans Service Representative (VSR) prepares VA Form 21-441, Special Apportionment Decision, or other administrative decision format for the approval of an authorizer in accordance with M21-1MR, Part III, Subpart v, 1.A.2.a.

Exception: When a fiduciary has been appointed or designated for the Veteran, the fiduciary activity recommendation is sufficient authority for an apportionment. If the claims folder contains significant information that was not considered, the fiduciary activity should review the information prior to the award.

e. Preparing and Processing the Primary Award

When an apportionment cannot be processed through VETSNET, input the apportioned award through BDN to retroactively adjust the award of the primary beneficiary. Prepare and process the awards to the primary beneficiary and apportionee(s) in accordance with M21-1, Part V, Chapter 4.

Per M21-1, Part V, 4.06, establish a Type A (Veteran) master record by processing a regular or record-purpose award simultaneously with or before making an award to or for an apportionee. If there is no master record to support the apportionee award, the award is rejected.

A record-purpose award may be needed in the case of a Veteran whose NSC pension was terminated due to incarceration as discussed in M21-1MR, Part III, Subpart v, 8.B.4.h. Such an award supports payment of benefits to other beneficiaries, but does not provide payment of benefits to the primary beneficiary.


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e. Preparing and Processing the Primary Award (continued)

Note: Whenever possible, process apportionment claims using VETSNET Awards, in accordance with the provisions of the VETSNET Awards Handbook.

f. Effect of Deferred Awards on Pending Apportionment Claims

Use the table below to determine what award actions may be taken while one or more awards are deferred.

If an award is deferred for …

Then process the …

one or more pending apportionee claims

primary beneficiary’s award for the required withheld amount either

alone, or with the award to any other apportionee.

Note: The pending apportionee award can be processed at any time after the primary beneficiary’s Type A master record is established without the need to process another primary beneficiary award.

an incompetent primary beneficiary due to the appointment of a fiduciary

apportionee’s award immediately, if it is accompanied by a record-purpose primary beneficiary award.

Reference: For more information on processing an apportionee’s award with a record-purpose primary beneficiary award, see M21-1, Part V, Chapter 4.06 M21-1, Part V, Chapter 5 , and M21-1, Part V, Chapter 6.11 .


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g. Determining the Effective Date and Award Action After Apportionment Decisions

Use the table below to determine the effective date for an apportioned award.

If the apportionment is … Then …granted, and the primary beneficiary’s award was running at the time the apportionment claim was received

retroactively adjust the award of the primary beneficiary effective the first day of the month after the date the apportionee claim was received, creating any resulting overpayment against the primary beneficiary, and

make the apportionee award effective from the first day of the month after the date the apportionment claim was received.

Reference: For more information on retroactively adjusting the award and creating any resulting overpayment, see 38 CFR 3.400(e) , and 38 CFR 3.650 .

granted, and the apportionment claim was received with or before the primary beneficiary’s original claim

pay the apportionment on the basis of the facts found.

Note: This may be from same effective date as the of the primary beneficiary’s award.

granted and the apportioned amount is greater than the withheld amount

pay the apportionment for the amount previously withheld, from the effective date

determine the additional amount to be apportioned, as well as the effective date, and

send the primary beneficiary a notice of proposed adverse action covering the additional amount.

denied immediately restore all funds in withholding to the primary beneficiary.


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h. Rounding the Apportioned Amount

Round apportioned amounts to even dollars. Per 38 CFR 3.112, if the amount to be shared by two or more apportionees involves a fraction of one cent, disregard the fractional amount even though the total of the apportionees’ shares is less than the amount with a Type 1 withholding.

i. Balancing the Award Amount

The primary beneficiary’s award must be balanced to provide a sufficient amount under Type 1 withholding to equal or exceed the apportioned amount.

Reference: For more information on balancing award amounts, see M21-1, Part V, 6.11.

j. Distributing the Available Amount

The table below describes the distribution of the total amount available to the primary beneficiary for an institutionalized primary beneficiary.

Reference: For more information on “as to” amounts, see M21-1, Part V, Chapter 6.

When … And … Then …an institutionalized Veteran is to be paid only a portion of the total award

less than the full balance is apportioned to a dependent

the difference between the total award and the monthly rate payable on behalf of the Veteran is the Type 1 withholding.

Note: This situation may be encountered in the case of a claim for apportionment from a parent or estranged spouse, while the Veteran resides in a VA nursing home or domiciliary. For more information concerning adjustments due to hospitalization, see M21-1MR, Part III, Subpart v, 6.B.7.c and 38 CFR 3.551(e)(1) .


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k. Effect of Rate Changes on Primary Award

A Veteran award may provide for future rate changes not reflected in the apportionee awards.

Example: The Veteran’s award (total award) will be prospectively reduced from 100 percent to 80 percent. However, there is no change in the apportioned amount.

An apportionee award must not provide for any future rate change for any period beyond the last future rate provided for by the Veteran’s award.

Reference: For more information on effect of rate changes, see M21-1, Part V, 6.01.

l. Simultaneous Apportionment of Compensation or Pension and a Subsistence Allowance

When processing simultaneous apportionment of compensation or pension and subsistence allowance, follow the provisions of M21-1MR, Part IX, Subpart i, 1.A.6 , and M21-1MR, Part IX, Subpart i, 1.B.8 .

This will help to avoid overpayment and differences in the effective dates on the separate awards when the following two benefits are being received concurrently:

compensation or pension, and a subsistence allowance for vocational rehabilitation under 38 U.S.C.

Chapter 31.


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m. Notifying the Primary Beneficiary and Claimant

Advise both the primary beneficiary and the apportionment claimant of the decision, and furnish them due process notice of

the effective date of payment, if apportionment granted the amount of the apportionment, if granted the reasons for the decision the evidence used to make the decision their rights to representation the right to present new evidence including opportunity for a personal

hearing, and the right to appeal the decision, under

- 38 U.S.C. 7105A , and - 38 CFR 19.100-102 ,

by filing a notice of disagreement (NOD) within 60 days from the date of the notification letter.

Important: An apportionment claim is considered a contested claim. As such, appellate procedures as described in M21-1MR, Part III, Subpart vi, 6.A.2 apply. A 60-day time limit, not one year, is provided for submission of a notice of disagreement.

n. Responding to an NOD

When an NOD is received in response to an apportionment determination

treat it as a contested claim, and apply the procedures in M21-1MR, Part I, 5.B.5.a.

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4. Handling an Apportioned Award Subject to Offset or Withholding

Introduction This topic contains information on a Veteran’s apportioned award which is subject to offset under 38 U.S.C. 1151 or withholding due to the receipt of readjustment or disability severance pay, including

total award offset or withholding apportionment action while total award is offset for recoupment, and partial award offset or withholding.


a. Total Award Offset or Withholding

In some cases, a Veteran’s total award must be

offset under 38 U.S.C. 1151, or withheld because of the receipt of readjustment or disability severance pay.

In such cases, his/her award is not subject to apportionment until the offset for withholding has been completed.

Reference: For more information on recouping readjustment or disability pay amounts, see M21-1MR, Part III, Subpart v, 4.B.5.a.


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4. Handling an Apportioned Award Subject to Offset or Withholding, Continued

b. Apportionment Action While Total Award Is Offset for Recoupment

Follow the steps in the table below for consideration of an apportionment claim if a Veteran’s total award is offset for recoupment.

Step Action1 Do no set up a pending EP. Establish a future diary control for 90

days prior to the approximate date of complete recoupment to ascertain at that time whether an apportionment is still in order. For information on future diaries, see the Share User Guide

2 Inform any persons claiming an apportionment of the reason for the deferral and the anticipated length of delay.

3 When the diary matures, establish pending EP’s 130 and 600. See M21-1MR, Part III, Subpart v, 3.A.2.e

4 Inform the Veteran and the claimant of the apportionment claim, the evidence needed per M21-1MR, Part III, Subpart v, 3.A.2.c,

and the right to due process per M21-1MR, Part III, Subpart v,

3.A.2.d.5 Establish withholding in accordance with M21-1MR, Part III,

Subpart v, 3.A.2.e.

Note: Do not withhold for any period prior to the first day of the month in which the recoupment was completed.


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http://vbaw.vba.va.gov/bl/21/systems/docs/Share.pdf


4. Handling an Apportioned Award Subject to Offset or Withholding, Continued

c. Partial Award Offset or Withholding

In some cases

the Veteran is entitled to benefits for two or more disabilities, and the amount to be recouped is only the amount payable for the disability(ies)

which resulted in an award- under 38 U.S.C. 1151, or - of readjustment or disability severance pay.

In such cases

determine the amount to be apportioned or withheld on the basis of the balance of compensation payable to the Veteran, not on the basis of the total award, and

do not make an apportionment if the balance of compensation does not permit payment of a reasonable amount to any apportionee. (For more information on an interpretation of reasonable amount, see M21- 1MR, Part III, Subpart v, 3.A.1.d)

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